Mumbai: India’s benchmark stock index rebounded from its biggest drop in more than two weeks as Asian shares climbed for the first time since Japan’s record earthquake triggered a nuclear accident.
Also See | Gaining Ground (PDF)
Tata Power Co. Ltd, the nation’s largest electricity generator outside state control, rose 1.3%. State Bank of India, the largest lender, advanced the most in a month. Reliance Infrastructure Ltd surged 5.2% to its highest level in three weeks.
“Investors are breathing a little easier today,” said Avinash Gupta, an analyst at Bonanza Portfolio Ltd, a New Delhi-based brokerage.
The rebound in Asian markets and drop in oil prices have helped eased some of the concerns.
The Bombay Stock Exchange sensitive index, or Sensex, gained 191.05 points, or 1.1%, to 18,358.69. The S&P CNX Nifty Index on the National Stock Exchange added 1.1% to 5,511.15, while its March futures settled at 5,529.15. The BSE-200 Index rose 1.2% to 2,257.69.
The MSCI Asia Pacific Index rose 3.1%, the most since 30 November 2009, even as workers in Japan continued to battle radiation leaks at nuclear reactors.
The gauge’s drop on Tuesday took its decline from a 19 January peak to more than 10%, a magnitude defined by some investors as a so-called correction.
The price of oil fell as much as 1% to a two- week low in New York amid concern that the earthquake may reduce demand in the world’s third largest crude consumer.
The Sensex’s 10% drop this year makes it Asia’s worst performer after Japan among the region’s largest stock markets amid concern that government measures to quell inflation will hurt economic growth. The gauge has retreated 13% from a 5 November record.
Companies on the Sensex are valued at an average 17.2 times estimated earnings, down from last year’s high of about 21.5 times in March, according to data compiled by Bloomberg.
Reserve Bank of India Governor D. Subbarao on Thursday will raise the benchmark interest rate for the eighth time in a year, increasing it to 6.75%, all 26 economists in a Bloomberg News survey predict.
Tata Power advanced 1.3% to Rs1,226.85, trimming Tuesday’s 3.2% drop. Its March futures settled at Rs1,228.20. State Bank of India rallied 3.2% to Rs2,643.95.
Indian Oil Corp. Ltd, the largest refiner, rose 2.6% to Rs310.7 after saying it increased the price of jet fuel in Mumbai to Rs59,031.39 per kl from Rs55,500.06 earlier.
Coal India Ltd, the world’s largest coal producer, gained 1.6% to Rs343.9, its highest close since 5 November. The company may increase prices again by August after an average 12% increase last month, The Economic Times reported on Wednesday, citing Chairman N.C. Jha.
Overseas investors bought a net Rs507 crore ($112 million) of Indian stocks on 14 March, reducing their outflow from equities this year to Rs7,260 crore, according to data on the website of the Securities and Exchange Board of India.
India’s economic growth and corporate earnings lured foreign investors to buy a record $29.4 billion of local equities last year and made the Sensex the best performer and most expensive among the world’s 10 biggest markets.
Graphics by Naveen Kumar Saini/ Mint
Shikhar Balwani contributed to this story.